Let Reeves Make Retirement Your Christmas Gift
Mason Evans came to us and he received a pleasant surprise.
Aged 57 and with a pension pot worth £150,000, he wasn’t expecting to be able to retire for another few years.
However, when we reviewed his financial circumstances, we were able to uncover some exciting possibilities for Mason.
He owns a large house worth some £500,000 and, when we introduced him to the concept of equity release, it became evident that he could retire much earlier than he’d anticipated – next year in fact.
We helped him to frame a strategy whereby he’ll use his money purchase pension scheme to provide income for his retirement over the next 10 to 15 years, using phased drawdown. He’ll then fund the rest of his retirement by using equity release to take up to £250,000 out of the value of his house.
There are some risks which we’ve made him aware of. Mason understands and finds these risks acceptable. Now, thanks to the understanding he has gained of phased drawdown and equity release, he can look forward to giving up work next year, several years earlier than he’d ever dared hope, and secure in the knowledge that he can enjoy his house during his retirement.
There are two points to add here. The first, is that at Reeves we don’t advise on the transaction of equity release but we work with third party experts who will complete the full due diligence, and confirm if equity release is suitable for you. The second is that individuals in Mason's situation, planning to use equity release later in their retirement, could consider granting a power of attorney, so that somebody else can put their plans into effect on their behalf should something happen to them.
Reeves are planning a series of webinars in 2019 to focus on property and how it can be used as part of your retirement plans. Look out for these.
While we’re on the subject of retiring in 2019, we recently conducted an annual planning review for another client, Joe Smith.
Joe, who’s also 57, originally had a target of retiring eight years from now. However, the annual review, which we conduct for all our clients, brought out for him a better understanding of all the assets he had. There were savings such as ISAs which he’d never looked upon as being for retirement, but, when they were taken into account, earlier retirement became possible. In fact, Joe could also be giving up work in 2019.
An important lesson from both these examples is the importance of constantly reviewing all your assets and your aims and of keeping in touch with us so that we can discuss matters with you and often – as for Mason and Joe – present you with some pleasant surprises.
It is important that no actions should be taken without first taking advice. Personal circumstances and an individual's appetite for risk means that the advice for one person may not be the same for everyone. The information in this blog or any response to comments should not be regarded as financial advice. Reeves do not advise on Defined Benefit pension schemes. Reeves do introduce a third party specialists in areas of work we do not cover. Please note: This article has been published with the use of a fictional character to outline a case study.